Lululemon $LULU has delivered another set of disappointing results, and the stock is down about 17% today. Since the start of the year, it's already down over 40%, and since the beginning of 2025, it's off nearly 70%.

And the problem is probably no longer just that people are spending less on expensive clothing. In my opinion, Lululemon is starting to deal mainly with the fact that its brand is no longer as strong as it was a few years ago, and customers have much more choice. Brands like Alo Yoga or Vuori are taking a lot of its space.

You can see it quite well in the leggings themselves, on which Lululemon built much of its success. Their sales fell about 20% last quarter, and revenue in the Americas dropped 8%.

Because of this, the company again lowered its guidance and now expects revenue to decline 5% to 7% for the full year. Just a few months ago, it was forecasting at most a 1% decline.

Now a lot will depend on new CEO Heidi O'Neill, who comes from Nike and takes over leadership next week. But she's getting the company at a time when she'll have to come up with products people really want to wear, and above all make Lululemon a bit more interesting as a brand again.

After such a drop, $LULU seems to me at least worth watching. The question is whether you're buying a quality brand with temporary problems, or a brand that has simply lost some of its magic, similar to what's happening with Nike.

Is anyone following Lululemon? Would you consider buying after such a drop?